Event gamelook express: on April 11, the version authority has issued the first batch of game version numbers in 2022 to the reviewed game products, and it is also the first time to issue game version numbers since July 22, 2021. According to the latest announcement of the game approval results of the State Press and publication administration, a total of 45 game version numbers were distributed this time.
Comments:
1. The policy tends to be stable and slow, and the Internet and games benefit the most. The previous meeting of the Finance Committee (March 16) has made it clear that relevant departments should earnestly assume their responsibilities, actively introduce policies conducive to the market and carefully introduce contractive policies. All policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations. We believe that the media Internet industry is strictly regulated by policies and belongs to an industry with high iteration and continuous innovation. The stability and consistency of policies are important factors to maintain the continuous profitability of the media sector. Therefore, we have made a judgment in the weekly report “policy supervision tends to be stable and slow down, and we continue to be optimistic about the Internet sector with oversold prices” released on March 21: the second edition has been suspended for more than half a year, and the expectation of opening up as soon as possible has increased, Game companies with stressed performance are expected to benefit. The release of the game version number meets our previous expectations: (1) at present, the heavyweight products of mainstream listed companies are subject to the release progress of the version number. After the release of the game version number, the certainty and predictability of the online schedule of such game products are enhanced; (2) After more than eight months of suspension of edition numbers, the game industry has experienced a significant liquidation, and the competitive advantage of leading game companies is highlighted under the survival of the fittest.
2. The game going to sea has become a deterministic trend and will not be stopped by the release of the version number. Affected by the previous suspension of game version numbers, game companies have achieved more optimistic results in seeking self-help from the game at sea. Therefore, the re issuance of game version number will not change the formed trend of going to sea. In the future, going to sea is still an important source of performance for game companies, and the resonance of China + overseas business is expected to improve the performance flexibility. According to gamelook, sensor tower released the annual inventory of 2021 Chinese mobile games going to sea. In 2021, 42 mobile games in China received more than $100 million in revenue in the overseas market, an increase of 5 models year-on-year. Among them, the U.S. market contributed $3.6 billion to the top 30 of China’s outbound mobile games, an increase of 53% at the same time, and surpassed Japan to become the largest overseas market of China’s mobile games. In 2021, Q3 China Mobile Game ranked 10th in the top 20 list of revenue in the United States, and “Puzzles & survival” produced by Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) ranked 10th.
3. The end game market has strong demand and weak supply. Pay attention to the reverse “hand to end” trend. On April 1, we released the game industry’s in-depth “Chinese games come from end-to-end games and become mobile games. We pay attention to the reverse” hand to end “trend. We believe that the end-to-end game market, as the largest game segment in China in the early stage, has been significantly underestimated: (1) there is still demand in the end-to-end game industry. At present, the shrinking market scale is mainly due to the lack of high-quality content supply. Therefore, the R & D manufacturers of head end games may reap large dividends by launching end-to-end games. (2) In the VR / AR era, companies with strong end game R & D strength may benefit. Large scale VR games are more similar to PC or host games, and have higher requirements on the overall quality of the game. Therefore, companies with end game R & D strength are expected to obtain the first mover advantage in the era of immersing in the Internet. The end game is currently in a weak supply state, and the development of new end games also needs the game version number. Therefore, we expect that the release of the game version number is expected to promote the reverse “hand to end” process.
Investment advice
We are optimistic about the fundamentals of the game industry for a long time, and the short-term policy disturbance is expected to promote the accumulation of the game industry. At present, the share price of game companies has experienced a deep correction due to the suspension of edition numbers. After the reissue of edition numbers, the industry certainty has been established and has long-term investment value. It is suggested to focus on [ Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) ], which has strong operation ability, proven high-quality game R & D ability and sea distribution ability; [ Perfect World Co.Ltd(002624) ] with high-quality R & D ability and end-to-end tour of Zhuxian world; Focusing on research and development, small and beautiful [ G-Bits Network Technology(Xiamen)Co.Ltd(603444) ]; [netease-s] with rich product matrix and strong risk resistance; [bilibili-sw] and [heart company] which are greatly affected by the game version number.
Risk tips
The risk of deterioration of game competition; Risks of repeated policies; The risk that the process of going to sea is not as expected.
